February 7, 2002; Hennepin County
2/7/2002 10:14:43 AM
This is an opinion of the Commissioner of Administration issued pursuant to section 13.072 of Minnesota Statutes, Chapter 13 - the Minnesota Government Data Practices Act. It is based on the facts and information available to the Commissioner as described below.
Facts and Procedural History:On December 13, 2001 IPA received a letter dated December 11, 2001, from Gary Hill, of KSTP-TV News. In his letter, Mr. Hill asked the Commissioner to issue an opinion regarding the fee Hennepin County charges for copies of the Hennepin County Property Tax System (PINS). IPA, on behalf of the Commissioner, wrote to Patrick O'Connor, Director of Hennepin County Taxpayer Services, in response to Mr. Hill's request. The purposes of this letter, dated December 18, 2001, were to inform him of Mr. Hill's request and to ask him to provide information or support for the County's position. On January 9, 2002, IPA received a response, dated same, from David Hough, Senior Assistant Hennepin County Attorney. A summary of the facts is as follows. On August 27, 2001, Mr. Hill wrote to Donald Kopel, Information Technology Supervisor for the Hennepin County Taxpayer Services Department. Mr. Hill noted that the County had quoted a price of $13,500 for an electronic copy of the public property tax records. Mr. Hill asked for clarification. On September 12, 2001, Mr. Kopel wrote back and provided additional information. He stated, The documented development cost for the [PINS] for the period 1975 to 2000 is approximately $14,251,358. Mr. Kopel cited Minnesota Statutes, section 13.03, subdivision 3(d), noting that in certain situations, a government entity is entitled to charge a fee above and beyond the actual copying costs. He wrote, The additional cost is pro-rated at a reasonable fee until such time as the total development costs are amortized over the life of the system. Mr. Kopel stated that the County currently has 385,715 Property ID Numbers (PIDS) and that the per PID charge is $.035. He wrote that personnel services costs are $200 and the CD-rom charge is $3 for a total cost of $13,703. In a letter dated September 19, 2001, Mr. Hill asked for further clarification. Mr. Kopel responded in a letter dated October 22, 2001, to which he attached several documents. He explained that in 1991, the County determined that the per PID cost was $.01. Mr. Kopel further explained that in 1996, the County developed the process for creating the Property ASCII Extract (PAE) data file. Then, in 1996, the County adopted a sliding fee schedule, based on the number of PIDs requested. Mr. Hill then requested an opinion. Issue:In his request for an opinion, Mr. Hill asked the Commissioner to address the following issue:
Discussion:When an individual requests copies of data of which s/he is not the subject, pursuant to Minnesota Statutes, section 13.03, subdivision 3(c), the government entity may charge the actual costs of searching for and retrieving government data, including the cost of employee time, and for making, certifying, compiling, and electronically transmitting the copies. In addition, Minnesota Rules Part 1205.0300, subpart 3, provides that an entity, in determining a fee, shall be guided by the following: cost of materials; cost of labor, any schedule of standard copying charges; any special costs; and mailing costs. In the case of this opinion, Hennepin County asserted that because the database has commercial value, the County may charge a commercial value add-on fee. Pursuant to Minnesota Statutes, section 13.03, subdivision 3(d): When a request under this subdivision involves any person's receipt of copies of public government data that has commercial value and is a substantial and discrete portion of or an entire formula, pattern, compilation, program, device, method, technique, process, database, or system developed with a significant expenditure of public funds by the agency, the responsible authority may charge a reasonable fee for the information in addition to the costs of making, certifying, and compiling the copies. Any fee charged must be clearly demonstrated by the agency to relate to the actual development costs of the information. The responsible authority, upon request of any person, shall provide sufficient documentation to explain and justify the fee being charged. In his response to the Commissioner, Mr. Hough quoted section 13.03, subdivision 3(d). He wrote, The PINS property tax attribute data has significant commercial value, as evidenced by the hundreds of persons and corporations which have purchased the electronic format and paid the Board authorized fee. Mr. Hough listed the various documents that Mr. Kopel had previously provided to Mr. Hill. In addition, Mr. Hough made the following comments. He discussed the Hennepin County Information Technology Department summary reports. He stated: The report for 1975 - 1990 included both computer and personnel costs which totaled $10,591,358. This $10,591,358 was used in determining the original rates that were adopted by the Hennepin County Board in 1991. The 1991-2000 report lists both computer and personnel costs. Hennepin County from 1991-2000 only used the personnel costs in determining development costs. The cost breakdown is as follows: 1975 - 1990 Report Total $10,591,358
Less personnel costs
Total $14,251,358 Mr. Hough further wrote, Hennepin County in determining these costs only included the actual programming development costs. No overhead or administrative costs were included. The personnel costs represented in these summary reports were taken directly from the reports of individual Hennepin County employees over the twenty-five year period. In conclusion Mr. Hough wrote: Hennepin County has incurred development costs for the PINS in excess of $14 million. In 1991, the Hennepin County Board authorized a $.01 per property identification number or parcel (PID) (per database) charge for providing property tax attribute data electronically. In 1996, the Hennepin County Board after a public hearing, adopted the Property ASCII Extract (PAE) file fee schedule. This schedule provides for a sliding fee based upon the number of properties extracted. Since providing the PINS in electronic format, Hennepin County has recovered approximately $1.2 million. Mr. Kopel in his October 22, 2001 letter states, [I]t is reasonable to assume that development costs will never be recaptured. In Advisory Opinion 01-030, the Commissioner discussed the commercial value add-on fee. He stated: This provision was the result of a compromise that originated from a proposal brought forth by Hennepin County. The County sought legislative approval to 1) copyright County databases, and 2) allow user fees to fund databases that the County would build and maintain to carry out required County functions. In adopting the compromise language, the Legislature acknowledged that there are situations when a government entity should be allowed to charge more than the actual cost of making the copies. Thus, the language in section 13.03, subdivision 3(d), allows government entities to recover development costs the entity has incurred in the course of normal business operations when data such as those contained in a database were developed with a significant expenditure of public funds and the requestor could benefit commercially from obtaining the data. As discussed above, pursuant to section 13.03, when an individual requests copies of data, the government entity may charge certain actual costs. If the data have commercial value, the entity may charge an additional fee. However, the entity must be able to demonstrate that any such additional fee relates to the actual development costs of the information. At issue in this opinion is whether the County has clearly demonstrated that its add-on fee relates to the actual development costs of the database. The Commissioner has the following comments. In this case, the County states that the development cost for the PINS is $14,251,358, and is for the time period from 1975 to 2000. It is evident, however, that the County calculated this cost by including ongoing costs incurred through 2000. For example, Mr. Hough wrote that the Hennepin County Information Technology Department summary reports document the development costs from 1975 through 2000. He wrote: The 1991-2000 report lists both computer and personnel costs. Hennepin County from 1991-2000 only used personnel costs in determining development costs....Hennepin County in determining these costs only included the actual programming development costs. No other overhead or administrative costs were included. The personnel costs represented in these summary reports were taken directly from the reports of individual Hennepin County employees over the twenty-five year period. One of the reports to which Mr. Hough referred is entitled, [PINS] Initial Development and Ongoing Cost Recap. This clearly implies that ongoing costs have been calculated into the total development cost. In addition, in 1991, when the County determined the price per PID, it relied upon development and maintenance cost recovery allocation. The document entitled, 1991 Property Information System (PINS) Data Base Product Pricing states: ...the development and maintenance cost recovery allocation is based on amortizing a portion of the actual cost of developing and maintaining the PINS system since 1975. The amount to be recovered annually has been determined by taking .02%, an assigned amortizing value, of the PINS development costs from 1975 to 1990...Maintenance recovery was determined by taking .02% of the respective portions of the Departments of Property Tax Public Records and Assessor's 1991 annual budget...and the 1991 projected system for maintenance for PINS.... Based on these statements, it is clear the County finds it appropriate to include, in the add-on fee, not only its initial development costs for the system, but also its costs of continued development and maintenance since 1975. It is the Commissioner's opinion that when the Legislature adopted the commercial value add-on fee, it did not intend that a government entity recapture ongoing development/other costs beyond the initial development expenditure. In 1975, the County began the development of the PINS. However, the situation is not one in which the County's initial expenditure for development of the PINS occurred for 25 years (between 1975 and 2000), after which the County allowed the public access to the database. Rather, as the 1991 Property Information System (PINS) Data Base Product Pricing document states, ...copies of and direct access to this information have been made available to commercial firms for many years. The County, in calculating the development cost for the PINS for the period 1975 through 2000, apparently included ongoing costs. The burden is on the County to clearly demonstrate that the add-on fee relates to the actual development costs of the information. The County has not met that burden. Therefore, the County's charge is not appropriate. In addition, the Commissioner questions whether the County's charge of $200 for the actual costs associated with searching for and retrieving the data...and for making certifying, compiling, and electronically transmitting the copies of the database is justified. The County did not provide any breakdown of that cost other than referring to it as a service charge. Opinion:Based on the facts and information provided, my opinion on the issue that Mr. Hill raised is as follows:
Signed: David F. Fisher
Dated: February 7, 2002 |
Commercial value
Copy costs
Commercial value
